Editor's note: The following questions and responses are
derived from recent articles of Dr. Fekete's. And some of them deal with a
recent paper by Dr. Richard Ebeling. However, we wish to note that Dr.
Ebeling's views are within the mainstream of a certain Misesian perspective.
Not only do his perspectives represent the larger viewpoint of an element of
his peers, his career shows him to be a staunch proponent of freedom and a
courageous proponent of free-market thinking. Singling him out personalizes
what is obviously a theoretical disagreement – and one, in fact, that might
better have been better handled in a theoretical manner instead of an ad
hominem one. We regret any offense taken by either party.

With that, let’s jump right in:

AF: …money must be not just a
commodity; it must be the most marketable commodity, the marginal utility of which is virtually constant. Mises categorically
stated that constant marginal utility is
contradictory in that it indicates infinite demand. (emphasis added)

Here in a nutshell is one example of the confounding nature
of Dr. Fekete.Which is it: “virtually
constant,” or “constant”?The terms do
not mean the same thing, yet he uses one to beat Mises over the head regarding
the other.

AF: You cannot reconcile the
variable demand for commercial credit with the idea of "100 percent gold
standard."

I believe you can, although human nature might struggle with
the necessary price adjustments.In any
case, this problem likely isn’t terribly significant, as generally, I expect,
in a free-market economy, the demands for credit would slowly and somewhat
steadily increase.

Dr. Fekete will tie the significant fluctuation involved in
bringing crops to market in the form of consumption goods.But turning wheat into flour into bread is
not the only market in which credit is necessary – and certainly not as
meaningful in the economy today as it was in the heyday of real bills.

DB: Why is there a prejudice among
Misesians against real bills?

AF: That is a mystery.

As best as I can tell, the reason is inflation.Dr. Fekete will protest – real bills are not
a source of inflation.But he would be
wrong.It is a mathematical truism: if
he states that 100% gold standard is not sufficient – and some form of paper
demand on future gold must be created – then there is more currency circulating
than the gold backing it.

However, inflation is not reason enough to be “against” real
bills (or “gold bills” as Dr. Fekete now names these).If this is demanded in the market, there is
no justification to stop it by force.There is no reason to reject the practice.

AF: On the other hand, Dr. Ebeling
obviously thinks that gold bills are inflationary and therefore detrimental to
the public interest…. Please ask him why he thinks he knows better than the
producers of goods of higher order did who accepted payment in gold bills and
did not insist on getting paid in gold coins.

That’s what I said.

AF: Further problems with central
banks arose during World War I, especially in the United States. The Federal
Reserve (F.R.) banks started putting their credit at the disposal of the
Entente powers to finance their purchases of war materiel in violation of the
F.R. Act of 1913, to say nothing of the Neutrality Act, practically the same
day as war broke out in Europe in August, 1914.

There is a hidden corner within the new-Austrian community
that looks at the initial Federal Reserve legislation as sound.This ignores the reality that monopoly will
always lead to corruption.Dr. Fekete
has identified one of the earliest corruptions of central banking within this
statement.

DB: What will the nature of the
deflation be – a collapse of the monetary system?

AF: Much more than that. It will be
a repetition of the deflation and depression of the 1930s, but on a much larger
scale. Falling-domino-style bankruptcy of firms, devastating waves of
unemployment, falling prices induced by falling interest rates are just some of
the consequences.

It may be all of the things Dr. Fekete states; but these are
not “Much more” than the “collapse of the monetary system”; they are much less.

A true collapse of the monetary system will result in the
death of perhaps 95% of the people in the developed world. Is this the future
Dr. Fekete predicts?Has he planned accordingly?
If not, I will suggest he doesn’t truly believe in the possibility of a collapse.

This post received, by far, the most comments of any post I
have written.I had an extended dialogue
with who I believe to be (as the comments were by “Anonymous”) one individual.He had no problem criticizing me for my lack
of understanding about the war from an Eastern European perspective – which at
the time was certainly true and today is still somewhat so.The tone was often derogatory; at the same
time, I learned quite a bit from the exchange. So, to the extent I felt the
conversation was somewhat productive, I continued.

However, I stopped replying after the following comment –
after first recognizing that I might have enlightened him a bit regarding
Roosevelt’s actions:

Anonymous July 24, 2013 at 2:31 PM

Also let me ad[d]ress this literary
crown jewel:

BM: "What would happen? I
envision, in the end, two spent countries, neither capable of doing any
significant harm to western states – who, in the meantime, armed themselves
sufficiently."

Are you in a habit of telling Jews
that "Holocaust was not a big deal".Because that statement actually would be more accurate. Where do you
think WWII happen? Connecticut? The North Pole? That statement is so out there
that here you go: Some relevant WWII jokes for you

Q: Do you know what is the title of
the chapter on "western front" In Russian textbooks?

A: The bombing of civilians.

Q: Why did Americans drop the
atomic bombs on Japan?

A: Because after 3 years of bombing
Germany they finally realized they can't hit sh*t with normal bombs.

Q: Where are western casualties of
WWII listed in the comparison table?

A: Under "statistical
error".

I could go on. Sorry for the burn
but you were sooo asking for it :D

A simple premise – the US had no business getting involved
in European wars, and even France and England could have minimized if not
avoided the harm of a European war if they just stayed out and / or didn’t instigate
matters in the first place.This is
where I came from in the subject post and in much of my writing to date on the
subject.

Since then, certainly I have looked into other perspectives,
including from a Russian – Suvorov.While my understanding of the roots of the
war as well as the events during the war continues to increase, I have read
nothing to change my view that the west, and especially the US, should have
just stayed out.With or without the US
involvement, life for those in central and eastern Europe was going to be
intolerable, if not deadly.

In any case, this was almost a year ago.

Twice: Recently,
in a conversation about the situation in Ukraine with someone well-versed in
Russian history and perspective, a similar comment came to light.Not similar, like obnoxious, but similar like
sentiment.To paraphrase, the comments
from individuals like Ron Paul and posts at LRC are seen as horrendous by
people living in the Ukraine.Putin is being
painted as a saint.

Now I have not read such comments – I see criticism of US actions,
but not praise of Putin or his actions.Some
issues of relativism (which I will further expand upon shortly), but not
praise.

Am I blind to this because of my western perspective?Or are the critics blind to this because of
their Eastern European perspective?

My first question.. how much is
Russia Today supporting sites like PCR , Lew Rockwell (which both run on
shoestring budgets by the way) who are both stumping for Russian domination in
Ukraine…

Before spouting all this pro Moscow
propaganda of their own, perhaps these guys need to stop and realize that they
are throwing Ukraine under a bus "blindly" as they attack the West's
agenda for control.

Again, I don’t see this; what I see is condemnation of US
involvement.The commenter vanyam seems
to recognize the distinction:

Before you throw Ukraine under the
bus, place your disgust over US hegemony where it belongs.. in America.

This is what I read when I read PCR or posts at LRC.I don’t see this as the same as approval of
Russian actions (although some statements can be read in relative terms – for example,
Russia has more interest in Ukraine than does the US.This is, it seems, undeniably true – to the
extent one can speak of national interests).

Saturday, March 29, 2014

I continue with my detailed review of this book; for all
posts in this series, see here.

Many point to the difficulties of this Soviet invasion of
Finland as evidence of the lack of capability of the Soviet military; according
to Suvorov, and given the winter conditions and the elaborate defenses
established, it was one of the most impressive offensive showings of the
war.Stalin demonstrated that he would
pay any price to achieve his objectives.I will touch further on this controversy at the end of this post.

The story, and controversy, will revolve around the
Mannerheim Line – a line of Finnish defenses established to repel any Soviet
invasion through the Karelian
Isthmus.Starting shortly after the
end of the Great War, the Finnish Army began work on fortifications on the
isthmus – Finland having just won independence from Russia.

This activity increased significantly after 1929, with a
solid line of fortifications known as the Mannerheim Line, named for the
Commander-in-Chief who had won the war of independence in 1918. (P. 136)

It was this territory that Stalin demanded from Finland:

In October of 1939, immediately
after the division of Poland between Germany and the Soviet Union, Stalin’s
diplomats addressed the government of Finland, demanding the cession of the
Karelian Isthmus. (P. 136)

Stalin offered two-for-one in terms of raw acreage – a trade
of land for land.While offering double
the acreage in exchange, in terms of strategic significance Stalin might as
well have asked for all of Finland:

The Karelian Isthmus is a direct
gateway to the capital of Finland, the largest ports and most populated
regions. (P. 136)

Of course, the offer was not accepted.But this was not the end of Stalin’s
plans.He also prepared a second step –
a communist revolution in Finland.In October
1939, Stalin established within the 106th Rifle Division of the Red Army
a group of Finnish Communists, then living in the Soviet Union; this division
could then be declared the “national army of Finland” at the appropriate time.
(P. 137)

A communist national government was also prepared, one to be
sent to Helsinki in accordance with “the will of the Finnish people.”Otto Kuusinen, a Soviet intelligence officer,
was appointed head of this government. (P. 137)

Stalin issued an order to crush
Finland.For an attack, the Soviets
needed a pretext.As if on demand, on
November 26, 1939, seven artillery shells allegedly flew in from the Finnish
side and exploded on the Soviet side, killing three privates and one junior
officer. (P 137)

Finland had no artillery near the border, and declared
immediate willingness for an investigation by neutral third parties.Stalin did not wait.On November 30, after a brief but intense
artillery firing, Soviet troops crossed into Finnish territory. (P. 138)

Radio Moscow declared that the
Finnish people rose up against capitalists and the Red Army was heading forward
to assist the uprising.Units of the Red
Army occupied the small village of Terioki.Immediately Kuusinen’s “government” arrived from Moscow and went to
work. (P. 138)

The Mannerheim Line was not located on the immediate border,
but deeper in Finnish territory behind the “security pale.”The space in between was filled with granite
boulders and concrete blocks.The intent
was to slow down an invading army, such that those manning the true defensive
line had appropriate warning of the coming attack.

Friday, March 28, 2014

Max Borders has written a column at FEE, “Libertarian
Holism.”In it, he introduces a new
language to describe the holders of different views of libertarian /
pseudo-libertarian thought:

I hesitate to introduce yet another
dichotomy (thick or thin, brutalist or humanitarian)…

Yet he does so: holists and solipsists.

The masters of persuasion are
libertarian holists.

A holist is one who accepts that different individuals come
to libertarian thought in different manners; this is something no one can
disagree with, I imagine.More so, a
holist is skilled at effectively communicating with all such comers.A great skill, useful in all areas of life.

…the other end of the continuum
from the holist is the solipsist. This person is content in the echo chamber,
sometimes even being alone with his principles.

Once again, as I did in my post regarding libertarian humans
and brutes, I won’t spend much time or spend too many words on this
one.I offer only a couple of
observations:

Borders first identifies the group that comes to accept
libertarian thought through first principles, “like a principle of non-harm.”

I assume he means non-aggression; why he chooses to invent a
term for this well-known phrase is…confusing?A search of the two phrases yields over 13,000 hits for NAP, and about
30 for NHP.Is Borders trying to hide
something?

He then identifies other paths through which individuals
have come to accept libertarian thought: “personal or emotional values,”
“through talk of being excellent and/or realizing one’s concept of happiness,”
“Buddhist writings,” or “Limbictarianism”

Borders identifies that the
starting point for many is the understanding and acceptance of the
principle of non-aggression.However,
nowhere in his post does he suggest that – no matter how someone comes into the
libertarian fold in the first place – to be libertarian, one must certainly eventually land on the non-aggression-principle
square.

This is the root of libertarian principle.Without pointing to it always, there is no libertarian
– there is just my opinion is better than your opinion.

Second:

However we might admire the first
quarter of Mises’s Human Action, we
can pretty safely admit that reading it is not the only starting point.

He is referring to the point of view of the solipsist.

You want a real solipsist?Try Rothbard.More principled
that Mises and easier to read. Except
his is the name that cannot be mentioned, even when writing posts that, as
Borders suggests “Most who read this publication self-identify as a
freedom-lovers.”

Hayek is easy for the insider-libertarians to present.Mises is, thankfully, growing more so (there
is little choice, thanks to the power of the
internet).Eventually they will have
to admit that Rothbard exists, and that without a principled position on
non-aggression, there is no such thing as a libertarian.

I know principle
is tough, but without it libertarian philosophy will be just one more
political philosophy that makes it up as it goes along.

Sunday, March 23, 2014

Call me cynical but if this isn't
the beginning of an attempted purge then what is? Won't be too long until the
Tuckers, the Reisenwitzes, the Milequetoastarians and Technocrats start marginalizing
and disavowing those who don't toe the line of the culture-warring left.

(Edited for spelling.)

bionic mosquito March 16, 2014 at
6:28 PM

It is not the beginning of a
purge, it is the continuation of the (attempted) purge of Rothbard with a
tangential chapter being the (attempted) purge of Ron Paul.

I cannot recount all of the details regarding the purge and
shunning of Rothbard, however the story of the break between him and Cato is
fairly well known; additionally, even today, while there is finally – with
reluctance – at least some recognition of Mises even in the mainstream (Hayek
was always the safe Austrian), Rothbard is still all but ignored by virtually
every near-libertarian organization.

As to Ron Paul, it seemed to me the attempted purge began
almost immediately around the time he conceded his run for president two years
ago – even at the time Rand endorsed Romney.Various near-libertarians (or those who travel in intersecting circles) started
the process of subtly (and not so subtly) distancing themselves from Ron.I have previously documented several of
these; I will not revisit this here.

Back to the comments from my earlier post, continuing the
dialogue:

Anonymous March 19, 2014 at 5:49 AM

6:09 AM Anon here.

Sorry if I misconstrued this. The
treatment both Rothbard and Paul receive in the "movement" has irked
me for some time now, especially the tendency to negate their achievements and
portray them as a bunch of delusional loons.

So the questions
to ask would be why and who, correct?

(Edited for
spelling.)

bionic mosquito March 19, 2014 at
7:08 AM

I can only
speculate:

Why? Because the two stand for
principle over acceptance.

What was the principle?In Rothbard’s case, it was the non-aggression principle, to be applied in
all circumstances and to all actors both with and without badges.While one might debate certain conclusions
reached by Rothbard, I don’t believe one can demonstrate that he reached such conclusions
because he compromised with the principled objective – a world absent the
initiation of force.

In Ron Paul’s case?While I speculate that deep down inside, Ron Paul is probably in
complete agreement with Rothbard regarding libertarian political philosophy,
while in political office he stuck to an absolutely conservative reading of the
Constitution – consistent, he believed, with the most conservative intent of
the most conservative framers.

As for the desire for acceptance, C.S. Lewis gave a
wonderful speech on the Inner Ring.It is worth reading if you are not familiar
with it.Neither Ron Paul nor Murray
Rothbard ever showed an ounce of desire for acceptance over principle.

Continuing with my reply:

I imagine there is plenty of
psychological thought as to why less principled people who want to be seen as
principled react strongly when faced with principle.

I have no idea why Tucker wrote what he wrote regarding
principled libertarians.I have no idea
why those who shun or otherwise distance themselves from a principled
libertarian position do so.In other
words, I don’t know their thinking.

What is clear is behavior, as demonstrated in their
words.They speak as if change can come
without somebody somewhere holding to principle; they believe change can come
via an uneducated population.They
believe (or want to convince others to believe) that they can hit the target
without aiming for the bulls-eye.

Who? The less principled who want
to be accepted into respectable society - whether for political, financial, or
other gain.

Both Rothbard and Ron Paul are reminders of principle.Such reminders are not welcomed by those
seeking acceptance.

There is a range of acceptable
dialogue within mainstream society.Politics, the mainstream press, and the business community all exist
within this dialogue.It is acceptable
to debate tax policy, but don’t question the legitimacy of taxation; it is
acceptable to question Fed policy, but don’t question central banking; it is becoming
marginally acceptable to question the Iraq war, but don’t question the right
for America to go to war at anytime and anyplace (although this seems to be
shifting, thank God).

I will return to the reason I began this post – a comment to
my
brief post in response to Tucker’s now infamous (within our circles) brutalist
vs. humanist article.In his article, I
see Tucker fighting, for whatever his reasons, against those who are
principled.

I have no idea to whom he is referring (and I haven’t seen
anywhere where he has identified the brutes).I can think of a few who have a public voice, starting with Murray
Rothbard and Ron Paul.I can also add
Hans Hoppe, Lew Rockwell, Walter Block, Tom Woods, and a few others.I wish there were hundreds.

If we ever, at some distant decade or century in the future,
come closer to some version of a libertarian society, it will be thanks to men
such as these, and these will be the ones that are remembered – no one will
remember the “milquetoasterians.”If we
never make such an improvement to life on earth, none of this will matter much
anyway.

Such principled individuals should be thanked.Among them are the most courageous people I
know.

In the world of political theories, the non-aggression
principle is as close as it gets to the golden rule – a rule
existent in numerous religions around the world and a rule as old as recorded
history.

Without a consistent, principled worldview, all that is left
is to make it up as we go along.